Will Androniko Fix Portsmouth's Financial Problems?

In one of the most unpredictable seasons in the Premier League, the one thing that is predictable is that Portsmouth most certainly will be relegated. With the Premier League imposing a 9-point deduction on the debt-ridden club for entering administration, the club has only 10 points to show and are bottom of the table, 14 points behind Hull City.

Portsmouth became the first Premier League club to go in to administration but anything is better than having to wind-up which is exactly what would have happened had the court decided in favour of Her Majesty’s Revenue and Customs who in March had served the club with an order to wind-up. Going into administration means basically allowing an insolvent (debt-ridden) company to continue trading with the hope/expectation that it will be able to survive. This is done my appointing an administrator whose duty it is to safeguard the interests of the company’s creditors. Portsmouth’s debt including taxes is £78 million and they will need another £20m to see-the-season-out. Andrew Andronikou of UHY Hacker Young, an insolvency practitioner has been appointed administrator to help them put their house in order.

Andrew Andronikou has a very good track record having helped Swindon Town with similar problems. He got off to great start by persuading the HMRC to formally drop their challenge over the validity of Portsmouth football club’s move into administration. Andronikou has vowed to help save the club and bring it out of administration in “six-eight weeks”. He said, ” I will be cutting to the bone, I can assure you. Restructuring starts today. There will be significant cost cuts at all levels. We have a huge job to deal with. I need to generate working capital in the next two months, we will have to sell one or two players but I am not looking to sell players on a fire-sale basis.”

Andronikou has since cut 85 jobs and put Peter Storrie the chief executive, on a salary of ”under £500,000″ until the club was sold. So...